Stocks Set to Slide Ahead of Bernanke Testimony


Shutterstock photo

U.S. stock futures are pointed south for a second straight day , as Wall Street continues to feel anxieties about Greek debt and a possible bankruptcy for the euro-zone nation. Greek officials will meet today to further debate the terms set forth by the European Union ( EU ), European Central Bank (ECB), and International Monetary Fund ( IMF ) in return for another bailout package. Back home, a fresh round of corporate earnings are on the slate, as well as Federal Reserve Chairman Ben Bernanke's testimony to the Senate Budget Committee. Bernanke is expected to deliver a similar message as he did to the House Budget Committee , but with a little more of an upbeat tone, thanks to last week's promising jobs data . Ahead of the bell, all three major market indexes are set to start the session with modest losses.

Dow, S&P and Nasdaq futures

In earnings news, Dow heavyweight Coca-Cola (KO - 68.03) said its fourth-quarter profit dropped 71% to $1.65 billion, or 72 cents per share, from last year's profit of $5.77 billion, or $2.46 per share. On an adjusted basis, KO's earnings came in at 79 cents per share. Revenue rose 5.2% to $11.04 billion. Results for the beverage behemoth bested predictions, as Wall Street was looking for earnings of 77 cents per share on $10.99 billion in sales. KO is looking at a 1.3% rise to open the day.

Meanwhile, banking giant UBS (UBS - 14.37) saw its fourth-quarter net profit decline 76% to 393 million Swiss francs, well short of consensus estimates for a profit of CHF739 million. Revenue for the period backpedaled 16% to CHF5.97 billion. "As in the fourth quarter of 2011, ongoing concerns surrounding euro-zone sovereign debt, the European banking system and U.S. federal budget deficit issues, as well as continued uncertainty about the global economic outlook in general, appear likely to have a negative influence on client activity levels in the first quarter of 2012," warned UBS. The U.S.-traded shares are currently poised to open about 1.9% lower.

Coinstar (CSTR - 50.56) reported fourth-quarter earnings of $31.5 million, or $1.00 per share - more than doubling from $11.7 million, or 35 cents per share, in the year-ago period. Meanwhile, revenue rose 33.2% to $520.5 million, due largely to a 39.5% increase in Redbox sales. Analysts, on average, were expecting a profit of 64 cents per share on sales of $498.1 million. Looking ahead, CSTR is forecasting first-quarter earnings of 76 cents to 91 cents per share, on revenue between $530 million and $555 million. Conversely, analysts are predicting a current-quarter profit of 86 cents per share on sales of $514.5 million. In addition, CSTR expects full-year earnings of $3.80 to $4.30 per share on sales of $2.08 billion to $2.25 billion, encompassing Wall Street's projections for earnings of $3.86 per share on revenue of $2.17 billion. The company also announced the $100-million acquisition of NCR Corporation's ( NCR ) DVD business. CSTR is surging more than 18.5% ahead of the bell.

Finally, YUM! Brands (YUM - 63.19) said its fourth-quarter profit grew 30% to $356 million, or 75 cents per share, from last year's profit of $274 million, or 56 cents per share. Meanwhile, revenue jumped 15% to $4.11 billion. Same-store sales increased by 21% in China and by 1% in the U.S. Results for the fast-food conglomerate edged past expectations, as Wall Street was looking for earnings of 74 cents per share on $4.03 billion in revenue. Looking ahead, YUM says it is "well-positioned to meet or exceed [its] annual target of at least 10% EPS growth in 2012." YUM is looking at a 1.8% increase right out of the gate.

Earnings Preview

Today's earnings docket will also feature reports from Walt Disney ( DIS ), Toyota Motor ( TM ), Buffalo Wild Wings (BWLD), Hartford Financial (HIG), OpenTable (OPEN), Panera Bread (PNRA), Perrigo (PRGO), SolarWinds (SWI), and Scotts Miracle-Gro (SMG). Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar kicks off today, with the Federal Reserve's consumer credit report on tap. On Wednesday, the regularly scheduled crude inventories report will hit the Street, while Thursday features weekly data on jobless claims, along with the government's wholesale inventories report. Finally, Friday wraps up with the December trade balance, January's Treasury budget, and the most recent Thomson Reuters/University of Michigan consumer sentiment index. Furthermore, Bernanke will once again step up to the podium, with the central banker slated to speak at the NAHB International Builders Show.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,126,195 call contracts traded on Monday, compared to 638,375 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average was 0.59.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

The major European indexes are planted south of breakeven at midday, thanks in part to a disappointing earnings report from Swiss bank UBS. Greece also remains a point of concern, after Prime Minister Lucas Papademos spent all night debating the terms of a bailout package with officials from the EU and IMF. While the country desperately needs additional aid to avoid defaulting on its debt obligations, Greek workers kicked off a 24-hour strike today to protest the proposed austerity measures. At last check, the German DAX is down 1.1%, the French CAC 40 has slipped 0.5%, and London's FTSE 100 is off 0.6%.

Overseas markets

Currencies and Commodities

The greenback is trading higher this morning, with the U.S. dollar index up 0.1 % at last look. Crude futures, meanwhile, have extended yesterday's decline , with the front-month contract down 72 cents, or 0.7%, ahead of the bell. What's more, gold futures are pointed south, falling $8.50, or 0.5%. At last check, the malleable metal was trading at $1,716.40 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing , Options
More Headlines for: DIS , EU , IMF , NCR , TM

More from Schaeffer's Investment Research


Schaeffer's Investment Research

Schaeffer's Investment Research

Market News
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by